2006-11-12 16:09:44 · 5 answers · asked by sam k 2 in Business & Finance ➔ Taxes ➔ United States
No, loan proceeds aren't taxable whether they are student loans or some other kind of loan.
2006-11-12 16:50:12 · answer #1 · answered by Judy 7 · 0⤊ 0⤋
If you earn interest on the money that you deposit, the bank will send you a 1099 form for the interest you made and the amount you make is considered taxable income. I wouldn't worry about it if you make less than $300 a year in interest. You will still have to file taxes but shouldn't owe anything. If anything, it is a way to lessen the burden of interest you pay on your loan. Especially if the loan is subsidized.
It all kind of balances out because the amount you borrow toward education is tax deductable.
2006-11-13 00:52:58 · answer #2 · answered by Red 4 · 0⤊ 0⤋
No. The future income you'll use to pay back the loans will be subject to normal taxes, but not the loan money itself, since that would be double taxation. It's analogous to taking out a car or home loan, except that the money is earmarked for approved personal expenses while attending school. This is one reason why colleges will establish a 'typical' student budget that puts an upper limit on how much you can borrow, and defines 'acceptable' student expenses for the borrowed money.
Note: I've assumed that you are asking about the tax system in the U.S. -- unfortunately, I don't know about the tax situation in other countries.
2006-11-13 00:23:06 · answer #3 · answered by Christopher C 2 · 0⤊ 0⤋
No it is not.
2006-11-13 01:03:05 · answer #4 · answered by Anonymous · 0⤊ 0⤋
DEPENDS IN WHICH AREA OR COUNTRY YOU STAY.....
2006-11-13 00:17:03 · answer #5 · answered by Dr. King 3 · 0⤊ 3⤋